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- Title
Economic growth, portfolio balance, and the balance of payments.
- Authors
Chen, Chau-Nan
- Abstract
Economic growth, portfolio balance, and the balance of payments. The paper generalizes current discussions on the problem of growth and the balance of payments, using a steady-state model which includes commodity, money, bonds, and equities. Based on the assumption that the flow demand for securities is determined by the wealth owners' portfolio preferences, while the flow supply of securities is determined by technical conditions, it is shown that whether the process of growth induces an excess demand or excess supply of securities (a deficit or surplus in the capital account) depends on the relative magnitudes of the income elasticities of demand for assets, the elasticity of substitution between capital and labour, the capital/output ratio, and various asset/income ratios.
- Subjects
ECONOMIC development; BALANCE of payments; SECURITIES; ELASTICITY (Economics)
- Publication
Canadian Journal of Economics, 1975, Vol 8, Issue 1, p24
- ISSN
0008-4085
- Publication type
Article
- DOI
10.2307/134062